The National Credit Code will apply from 1 July 2010. The main changes which will affect credit control practices in relation to regulated loans and mortgages will be:

• Requests by debtors for changes on the grounds of hardship*: Credit providers will have an obligation to respond in writing to such requests within 21 days. If the credit provider agrees to the requested change, the response must give particulars of it. If the credit provider does not agree to the requested change, the response must give reasons and information about the credit provider’s EDR scheme and the debtor’s rights under it.
• Default Notices: The content requirements will change significantly. Credit providers will need to use new forms of notice. Remember that default notices relating to loans secured by real estate mortgages should still be drafted so as to also comply with the legislation which applies to such notices in each State and Territory, and that you will also need to consider the service and time requirements imposed by that legislation.
• Requests by debtors to negotiate after a default notice is served*: Credit providers will have an obligation to respond in writing to such requests within 21 days, if they’re made before the notice period expires. If the credit provider agrees to a postponement, the response should explain any conditions and explain the effect of section 95 of the NCC should the conditions not be met (ie that the credit provider will not have to serve another default notice). If the credit provider does not agree to a postponement, the response must give reasons and information about the credit provider’s EDR scheme and the debtor’s rights under it.
• Section numbers will change: While the content of many other sections of the NCC relevant to credit control will not change, the section numbers will. References in your other template credit control notices will need to be changed.

*Does not apply if maximum amount of credit is more than $500,000.